Funding For Psychedelic Startups Hits Record Levels

This article was originally published on Microdose Psychedelic Insights and appears here with permission.

Anyone owning shroom stocks will know that the last few months have been a bumpy ride. Actually, more like a horrifying high-speed roller coaster hurtling in one direction — down.

The psychedelic medicine market has been taking a beating as of late, but despite this short-term pain the overall outlook continues to be strong. Clinical trials are advancing and positive studies and research continues to be released. Giving support to this positive macro trend is a recent report by CB Insights looking at the amount of capital funding going into new ventures in the psychedelic space.

The report states that funding to psychedelics startups continues to increase despite any short-term fluctuations. It’s a solid look at the sector’s market drivers, developing themes, and key implications.

Here are some highlights from the report (information taken from CB Insights’ report “Betting On Magic: Funding For Psychedelics Startups Reaches A Record High” found here).

The above chart shows that funding to psychedelic medicine companies increased more than 8x increase compared to 2019’s numbers, with this year’s funding total on track to surpass $700M.

So far in 2021 investments in psychedelic firms have reached nearly $600M, spread across 45 deals. This is another annual record, showing that big money continues to flow into the space. 45 major deals this year is a strong number, but the increase in deals per year is slowing down substantially while the total dollar value continues to rise — showing that there’s some investment consolidation happening around bigger startups with stronger foundations (example, Delix Therapeutics recently raised a $70M Series A, led by RA Capital and Artis Ventures)

Other industry highlights from the report:

• Funding for psychedelic digital health solutions is projected to grow 250%.
• 20 US states have loosened regulations around psychedelics research, helping accelerate studies, regulatory approvals, and healthcare access. 
• Approx 25% of psychedelic medicine companies focus on psilocybin and the compound accounts for over 50% of therapeutics in development.
• Drug R&D is still the biggest category, with nearly 40% of psychedelics startups and almost 50% of deals focused on drug development.

Overall this report gives an informative overview of the state of the sector and dominant trends in the psychedelic medicine industry. Despite any short-term market pain, the space seems to be developing in a positive direction.

Click here for info on the CB Insights report